American Bar Association

“In 2017, the ABA became aware of an unauthorized diversion of assets totaling approximately 1.3 million over a period of multiple years, committed by a non-management staff member. The employee was immediately placed on administrative leave when the unauthorized diversion of assets was detected and was terminated the following day. The ABA commenced an investigation and notified both the Executive Committee of its board of directors and law enforcement, with whom the ABA has cooperated fully in the ongoing investigation. Furthermore, forensic experts from the accounting firm of Grant Thornton were engaged to participate in the investigation along with the ABA Internal Audit, Financial Services staff and the General Counsels Office. The ABA reviewed and revised procedures including more stringent controls and monitoring and increased financial oversight. The ABA is in the process of seeking recovery of the funds from its insurance carrier.”

“The members of the Nominating Committee of the House of Delegates nominate the members of the Board of Governors, the elective offices of the Association which include the President Elect, Secretary, Treasurer, and Chair of the House of Delegates. The President-elect automatically becomes the President at the next Annual Meeting after his/her election as President-elect. Members who register for the annual meeting elect six members of the House of Delegates. The House elects the Board of Governors, and the officers of the Association, including the President-elect, the Chair of the House of Delegates, the Secretary and Treasurer. Members may nominate officers and governors by presenting a nominating petition to the Secretary with the number of member signatures specified in the bylaws for each elected position. Members may initiate a referendum to change or initiate ABA policy by filing a petition with the requisite number of signatures. The House, by majority vote, can direct a referendum on a question relating to the substance of the law, the administration of justice or the policy of the Association. In either case, the majority of members casting a ballot determine the result. All members may attend the meetings of the House of Delegates and may submit a resolution with report for consideration by the House.”

“The ABA House of Delegates elects the Board of Governors, and the officers which includes the President-elect, the Chair of the House of Delegates, the Secretary and Treasurer. The House is designed to be representative of the legal profession in the United States. Members of the Association who register for the annual meeting elect six delegates-at-large. ABA members of each state elect state delegates ABA members who belong to state and qualifying local Bar Associations also elect delegates, the number being dependent upon the number of ABA members and lawyers in the respective state or local association. Association members of ABA sections, divisions and eligible judicial conferences elect section/division delegates. Each section has a minimum of two delegates, with additional delegates dependent upon the number of members in each section. The U.S. Virgin Islands Bar Association, Guam, the Commonwealth of the Northern Mariana islands and American Somoa elect a delegate. State, local and territorial bar associations elect delegates according to their own rules. For purposes of election to the Board, the House is grouped into nineteen geographical districts. Governors serve staggered three year terms the House elects approximately one-third of the Board, and the President-Elect at each annual meeting. The Board of Governors consists of one member from each of the 19 geographical districts, nine section members-at-large, one law student member-at-large, one judicial member-at-large, two young lawyer members-at-large, and five Goal III members-at-large. The President, Chair of the House, President-Elect, Immediate Past President, Secretary and Treasurer of the ABA are ex-officio members of the Board of Governors. Every third year the Treasurer-Elect is included in the Board of Governors. The House elects the Chair of the House for a two-year term in even-numbered years.”

“Prior to filing the return with the IRS, it is reviewed by the organizations management and subject to review by the Audit Committee. The final Form 990 is shared on a secure website with all members of the Board prior to filing the return with the IRS, sufficiently in advance of the due date to allow Board members the opportunity to raise questions or concerns, if any.”

“Each Board member received the Conflict of Interest COI questionnaire this year. All responses were reviewed by the Accounting team at the ABA. Prior to each Board meeting, staff assigned to the Board of Governors distribute COI forms to Board members and collect the completed COI forms. If a Board member discloses a conflict regarding a matter before the Board, the Board member must disclose the conflict and, if necessary, recuse himself/herself from any matter involving the disclosed conflict, and the recusal is noted in the minutes.”

“The Executive Compensation Committee of the ABA Board of Governors reviewed compensation information of comparable entities and the performance assessment of the top management position and made a recommendation to the full ABA Board of Governors. The ABA Board of Governors approves the final compensation of the Executive Director of the American Bar Association. This process occurs every year and was last performed calendar year 2016.”

“The Executive Compensation Committee of the ABA Board of Governors reviewed compensation information of comparable entities and performance of other officers and key employees. When key employee positions become vacant, the compensation is reviewed by Associations Executive Director and the Human Resources department. This process occurs every year and was last performed in calendar year 2016. In the case of a vacancy occurring during the calendar year, the process occurs on an ad-hoc basis.”

“The ABAs Constitution and Bylaws, Business Conduct Standards, Conflict of Interest Policy, and the Audited Financial Statements are available on ABAs website www.abanet.org and also to the public upon request.”

“The ABA provides lawyers unparalleled opportunities for professional growth and service through numerous groups dedicated to specific areas of law. The Association currently has 22 Sections, which range in size from about 3,600 members to more than 51,000 7 divisions and 6 forums. All of these groups draw their membership from lawyers, judges, academics, law students and associate members with common interests. Sections include the following legal areas Administrative Law and Regulatory Practice Antitrust Law Business Law Criminal Justice Dispute Resolution Environment, Energy and Resources Family Law Health Law Civil Rights and Social Justice Intellectual Property Law International Law Labor and Employment Law Legal Education Litigation Public Contract Law Infrastructure and Regulated Industries Real Property, Trust and Estate Law Science and Technology Law State and Local Government Law Taxation Tort, Trial and Insurance Practice. Divisions include Government and Public Sector Lawyers Judicial Law Practice Law Student Senior Lawyers Solo, Small Firm and General Practice, and Young Lawyers. Forums explore new areas of developing law such as Affordable Housing, Air and Space Law, Communications Law, Construction Law, Entertainment and Sports Industries Law and Franchising. Sections, Divisions and Forums within the ABA provide members a myriad of opportunities for professional development, leadership development, networking, pro bono contributions, and education within their own particular field of interest and expertise. Sections and Divisions also contribute to policy-making on issues of importance to both lawyers and the public. Sections originate many of the recommendations that become the ABAs policy positions and act as checks and balances on recommendations of other entities. Through the work of these groups, the ABA benefits the public through improvement of both the profession and the legal system.”

“The ABA also publishes both print and electronic versions of the ABA Journal, which is provided free to approximately 400,000 members, as well as to numerous libraries interested in legal topics. The ABA also published more than 250 books and eBooks that were sold or distributed to more than 85,000 customers. These books offered guidance and counsel in every legal discipline and every aspect of a legal career. Many of these excellent books would not have been published by a commercial publisher because their revenue potential is not great enough for a commercial model. However, these publications are of great value to the profession, providing vital information to keep lawyers up to date on developments in the law. Thus, ABA publications serve clients, the public and courts by improving the education and professionalism of the nations lawyers. Because the ABAs mission is to serve the profession, many disciplines and authors are able to publish vital and timely information that would not otherwise be available to the profession.”

“Pension changes other than net periodic pension cost 12,248,881. Pension allocation to related organization 1,450,671. Total other changes in net assets or fund balances 10,798,210.”